Researcher sues Nichia over blue LED patent rights

TOKYO  Shuji Nakamura, the renowned developer of blue LEDs and violet lasers, has filed suit against his former employer, Nichia Corp., claiming that he holds rights to much of his patented work conducted there, and requesting about $17 million for that work.

The suit, filed in Tokyo district court, has stimulated argument about whether patents belong to an innovator or the innovator's employer. Nakamura said he wants rights to the patents in order to make them available for wider use. Researchers at Japanese companies usually sign a contract that gives all rights to innovations to their employers, and Nakamura said he signed such a contract when he joined Nichia.

Nichia essentially holds a monopoly on patents of blue LEDs developed by Nakamura, and the company does not license those patents to other manufacturers. Nichia has parlayed this monopoly into a successful market position.

"If Nichia had not monopolized the patents, the blue LED market would have grown 10 times larger [than it is today," Nakamura said. "LEDs are an energy- and resource-saving device, but Nichia checks its healthy growth."

Nakamura said he applied for patents covering his research while we worked at Nichia. In an interview conducted with EE Times while at Nichia, Nakamura said he had to persuade the company to apply for those patents because the company wanted to keep all the technology inside Nichia.

The petition against Nichia states that Nakamura holds 80 percent of the rights to key patents for blue LED production, while Nichia holds 20 percent. "If I win the suit, I would license the technology to other manufacturers," Nakamura said.

Rare request

"It is rare to demand that patent rights should be returned to the innovator, like Dr. Nakamura did," said Yoji Miyakoshi, managing director of the IP Research Institute of NGB Corp. (Tokyo), an intellectual property consultancy. "Usually innovators bring files demanding fair reward."

It is common for Japanese companies to pay researchers about $100 when applying for patents for their innovations, then another $100 when the patents are established. If the patent actually contributes to the company's business, researchers are again rewarded, but this payment is usually quite low.

"During service to Nichia, I applied for about 500 patents, but I got only 10,000 yen [about $100] per patent," Nakamura said. "[My] salary was completely the same as my colleagues in the seniority system. I got a nickname 'slave Nakamura' from overseas researchers."

In the lifetime employment system once practiced in Japan," researchers were rewarded somehow, sometimes by promotion or a better position," Miyakoshi said. "But lifetime employment is over, and researchers have started moving to other companies. Based on that recent trend, high-technology industries such as semiconductors, communications and pharmacy have started raising their reward to innovators in just the last couple of years. Nakamura's suit will accelerate that movement."

Nakamura, who worked at Nichia from 1979 to 1999, is now a professor and director of the Solid-State Lighting Center at the University of California at Santa Barbara. After 10 years of non-rewarded R&D work at Nichia, he said he started research on gallium nitride-based blue LEDs in 1989.

In his petition, Nakamura asserts that he pursued GaN-based LED development against the orders of Nichia, which ordered him to stop the work to concentrate on other devices such as GaAs/GaAlAs high electronic mobility transistor devices.

Nichia was not prepared to comment, a company spokesman said. "As Nichia has not got the petition yet, we cannot make any comment on it," he said. "But we believe that we are justified and [once we get the petition] immediately we will answer fairly and squarely to the complaint filed by the plaintiff."

Nakamura said his legal action was set in motion by a suit that Nichia filed last December in U.S. District Court for the Eastern District of North Carolina against Nakamura, North Carolina State University and Cree Inc., which employed Nakamura after he left Nichia. Cree had filed a separate patent infringement suit on blue LED technology against Nichia last September.

In its suit against, Nichia acknowledges that Nakamura's work has made Nichia a world leader in GaN-based devices, but asserts that Nakamura was working on behalf of Nichia, which provided him with money, facilities and materials. Nichia contends that Nakamura is still bound by the nondisclosure contract he signed when he joined the company in 1979. Nichia's suit asserts that Cree hired Nakamura because of the knowledge he gained in 20 years at Nichia, and says he should not disclose that information to any third party.

"I had no intention to file the suit against Nichia when I quit the company," Nakamura said. "All my hope was to start a new research life from square one in the United States. But Nichia's action last December was practically a hindrance to my work. It was nothing other than noise. It made me angry and I decided to file a suit from my side."

Nichia, founded in 1956, was originally a chemical manufacturer that specialized in phosphors. Its annual revenues remained less than about $168 million until 1994, at which point it started to grow based on its sales of blue and green LEDs. Its revenues have grown rapidly since, to about $588 million last year. The company expects its sales to reach about $756 million this year.